It’s not uncommon to see a penny on the sidewalk. It’s just as normal to locate pennies in between seat cushions. These days, pennies are either forgotten about or perhaps, used to fill up charity tins at your local convenience store. Is the one cent coin even really that necessary anymore? According to Canada’s finance minister, Jim Flaherty, the answer is “no”.
Immediately, one may assume that the penny is most certainly required for making cash purchases where exact change may be necessary. However, while this may be true, it is a fact that is apparently not significant enough to protect Canada’s copper coin from its inevitable fate.
As Bryn Weese writes in today’s edition of The Toronto Sun, “the penny’s days are numbered”. Flaherty believes that it’s only a matter of time for the Canadian one cent coin to become extinct. “I think it’s inevitable that eventually the smaller coin – the penny – would be eliminated,” he said earlier today.
This may have some Canadians scratching their heads wondering about the purpose of eliminating the penny from circulation. Weese points out that there are approximately 30 billion pennies currently in circulation. Because so many of them seemingly go unused due to either hoarding, loss or indifference to their value, the Royal Canadian Mint is forced to produced up to 500 million new pennies every year.
Strangely, this process costs the Mint a penny and a half per coin. The obvious financial loss caused by the production of pennies is now prompting the Mint to discontinue the seemingly unnecessary one cent coin.
Added Flaherty: “What we are seeing is hoarding of pennies, so the Mint has to keep producing pennies at a cost of more than a penny. At some point, this will have to end…I remember pennies being useful things. It’s a question of usefulness.”
Perhaps, it makes sense after all to eliminate Canada’s copper coin. Weese reveals that Pierre Duguay, the deputy governor of the Bank of Canada, has reported that the penny has lost a whopping 95% of its purchasing power since it was first introduced back in 1908.
If (although it now seems more like a “when”) the Canadian penny becomes eliminated, it will not mark the first time that such an occurrence has taken place. Weese reports that Sweden, Australia and New Zealand have all already dropped their own respective one cent coins. New Zealand, in fact, also eliminated its own version of the nickel in 2006.
At this point, it may be quite difficult to imagine not having the penny as part of the official currency in Canada. Most would have never thought of dropping the one cent coin from circulation. The inevitability of this happening, however, makes clear that apparently, a penny is no longer enough for one’s thoughts.